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To: Alex who wrote (12616)	6/4/1998 8:39:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116811

''To explain (the financial market problems), I'll let you into a state secret,'' Kiriyenko said. ''In Russia, as everywhere else, two plus two equals four.'' infoseek.com Crock! Kirieynko plagitised a 30 year-old Russian joke "two plus two in Russia equals four, often five, occasionally 6 to 9 but nevr 10..." (That is untill now -VBG-

To: Alex who wrote (12616)	6/4/1998 8:42:00 PM
From: goldsnow	Respond to of 116811

France achieves ambition with first Euro-11 talks 03:14 a.m. Jun 04, 1998 Eastern By Myra MacDonald PARIS, June 4 (Reuters) - France will achieve its ambition of an embryo European economic government with the first meeting on Thursday of the Euro-11 council, an informal policy body it hopes will act as a counterbalance to the European Central Bank. A key theme will be using budget cuts to prevent overheating in the euro-zone's peripheral economies and thereby head off any need for the politically independent ECB to raise interest rates to stamp out inflationary pressures, French officials said. France also wants talks on bringing economic data into line across the euro zone, looking for example at ways of producing EMU-wide balance of payment and current account figures which would strip out surpluses and deficits inside the group. The Euro-11 will meet at 6 p.m. (1600 GMT) in Luxembourg's secluded Senningen Castle ahead of a full meeting of all 15 European Union finance ministers (Ecofin) on Friday. British finance minister Gordon Brown, whose country holds the EU's rotating presidency but has opted out of EMU, was to attend the formal opening of the Euro-11 talks and then leave -- a face-saving compromise for Britain which fought hard against being left out of the 11's policy discussions. French officials said the Euro-11 would meet every month before the regular Ecofin talks and liaise closely with the ECB, which will set interest rates across the euro-zone from January next year. ECB president Wim Duisenberg for example is to be invited to the next Euro-11 meeting in July. But they stressed there was no question of compromising the autonomy of the ECB, cherished by Germany as a guarantee the new euro will be as stable as the mark. ''There will be nothing to threaten the independence of the ECB,'' one French official said. The aim was to seek ''a common assessment and common solution'' to the other problems faced by the euro-zone economy, while respecting the ECB's primary goal of price stability. Countries enjoying faster growth than the core states might previously have raised national interest rates to curb inflation. Now they could be encouraged to tighten fiscal policy instead. With France, Germany and Italy representing some 75 percent of the euro-zone's Gross Domestic Product, it would be absurd to raise EMU-wide rates to suit countries whose economies made up only a quarter of overall output, one official said. In April, the Paris-based Organisation for Economic Co-operation and Development named Finland, the Netherlands, Ireland, Portugal and Spain as EMU members at risk of overheating. It recommended that some might need to tighten fiscal policy even if they already had a healthy budget position in order to slow down their economies to sustainable levels. French officials said the Euro-11 council, which has no formal decision-making powers, would seek accord by consensus. ''It is in everybody's interests to find a suitable response,'' one official said. France has been haunted by the idea of suffering interest rates too high for its own economy since the Bundesbank sharply tightened monetary policy after German re-unification in 1990 and forced up the cost of borrowing across Europe as would-be EMU members tried to hold their currencies level with the mark. This time round though, it will probably find Germany an ally since, like France, it is running behind in the economic cycle compared to some of the smaller economies and also needs low interest rates to spur growth and help create jobs. The Euro-11 talks, which will involve some three hours of what France hopes will be ''substantial discussions,'' and Friday's Ecofin should also touch on pressing international economic issues, including financial turmoil in Russia and the weakness in the yen, ahead of a meeting of deputies of the Group of Seven wealthy nations in Paris next week. Finance ministers from the 11 countries introducing the euro were expected to hold news conferences at the end of the Euro-11 meeting, scheduled for 9.30 p.m (1930 GMT). Copyright 1998 Reuters Limited.

To: Alex who wrote (12616)	6/6/1998 1:28:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116811

WORLDJUNE 8, 1998 VOL. 151 NO. 22 ------------------------------------------------------------------------ Economic Meltdown If investors continue to take the money and run, all of Yeltsin's hard-earned stability could collapse By BRUCE W. NELAN ------------------------------------------------------------------------ he thunder out of Asia rolled into Russia last week, shaking the already wobbly economy and its twitchy investors. A spate of panic selling sent the stock market plunging and plunging, and it ended the week worth half as much as it was a year ago. Even before the bubble popped in Thailand, South Korea and Indonesia, Boris Yeltsin's government was living dangerously. It was juggling $150 billion in foreign debt, running huge budget deficits and resorting to a kind of pyramid scheme in which it was selling new treasury bills to pay interest on those it had sold earlier. Now foreign investors, burned by losses in Asia, are taking their money and heading for the exits. Trying desperately to hold on to them and avoid devaluing the ruble, the central bank last week upped its interest rate to 150%. Some experts are talking about a meltdown, but it's more like a drought. Russia's cash flow has dried up. This is not a new problem, and it is mostly Moscow's fault. Yeltsin and his several governments have never learned how to collect the billions in taxes that corporations and individuals dodge. Other billions are not collected because of sweetheart deals Yeltsin made with Russian oligarchs when he needed their political support. Nor has Russia figured out how to manufacture things anyone wants to buy, so its foreign-currency earnings come mostly from sales of oil and gas. Falling oil prices mean more cash shortages and still another unexpected problem. Last week the Russian government hoped to sell off a major oil corporation, Rosneft, and earn $2.1 billion, but there were no bidders. The central bank's reserves have dwindled to about $14 billion, and the Kremlin's great fear is that it will have to devalue the ruble. That would cruelly increase prices for ordinary Russian citizens, cause social and political upheaval and dash Yeltsin's hopes for his legacy as a reformer. At the Kremlin on Friday, he vowed there would be no devaluation and issued a fusillade of decrees on how to get tough with tax dodgers. He fired the chief tax collector and replaced him with Boris Fyodorov, a former Finance Minister and a true reformer. Yeltsin also announced plans to cut spending 12%. The International Monetary Fund concluded, or pretended to conclude, that Yeltsin's deficit-fighting plans sounded good enough for it to hand over a delayed installment of $670 million, part of a $10 billion loan package. While the IMF denies it is planning a big, new rescue effort, many financial analysts say that is what it will take to restore confidence. With that in mind, Anatoli Chubais, a former Deputy Prime Minister, arrived in Washington Friday on an emergency mission to talk with the U.S. Treasury, the IMF and the World Bank. --Reported by Andrew Meier /Moscow